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comScore released its August 2009 search numbers and while a lot of people, especially Microsoft fanboys, will be jumping for joy as Microsoft gained core search share by 0.4% to 9.3% and Google dropped by 0.1% to 64.6, I for one don't see the joy. In fact, comScore's report show's Google's dominance is quite secure and for the moment quite safe.

You see the numbers that everyone reports is a comScore metric called core searches which is basically searches off of the main search site like Google.com. However, as any Google fanboy (like me) will tell you, Google is much more than searches off of Google.com. It includes Gmail. Google Docs, Google Books, News, and of course a little known site called YouTube. And, that's where things get very interesting.

Look a little lower in the report and you'll see something called Expanded search which lists out all search activity including video and search activity on the non-core sites. It is this report which shows how dominant Google's search strategy is and why Microsoft has a long, long way to go to catch a giant.

Google isn't just 7x larger like the core report shows; all Google properties versus all Microsoft properties is TEN TIMES LARGER THAN MICROSOFT. Why do you think Google gives you all of those products for free?

YouTube while losing some share in August is the second largest search property around. YouTube is so large that it is 28% larger than Yahoo and twice as large as Bing. Think about that for a second, if Bing is hugely successful they'd have to knock of Yahoo and YouTube before Google even blinks.

You can look at the rest of the sites on the list, but they are so small it really doesn't matter much but they are interesting. For example, eBay and AOL losing share and Facebook is growing quickly probably driven by their huge growth.

Yes Bing is an exciting product. Yes Microsoft is spending $100 million in advertising to boost their search but right now all they have generated is a little buzz and some excitement. I haven't noticed a blip in the amount of paid search advertising that I've run for clients and I've tried. I also doubt Google has noticed a blip in their search activity. In fact, I bet Google is more concerned with expanded search and in that case, Google is STILL growing. Microsoft isn't even close right now.

My wife just walked into my office and asked if had the number to our local Long Valley, NJ PNC bank. So like the smart mouth I am sometimes I said "You know there's this thing called Google" and then I gave her the phone number. As she walks out she says "I use Bing!" which was an awesome reply. So out of curiosity I went to Bing and then to Google and typed out the exact same search queery "pnc bank long valley, nj". And do you know what I found, Bing's results were organized better. See these screen shots:

Now we'll look at Bing. Right up at the top is the Long Valley branch phone number. Now it is hard to find it on their local map, but I know it is Long Valley because of the NPANXX combination (908876). Of course at the bottom is the Yellow Pages listing.

Now let's pop over to Google and here's their screen shot. At the top is the main PNC Bank page with some links but nothing there about branch locations and historically those bank branch locators take too many clicks to get the answer. #2 result is Yahoo's local listing where the phone number is which is what I originally gave to my wife. #3 is a job listing and #4 is Google's local listing with a much easier to read map and the phone number.

It is almost like Bing knew I just needed the local branch phone number and not everything else. Google correctly listed the most relevant search for PNC Bank at the top but put the local listings at the bottom which is not quite the order for a local search. Anyway, Google is still #1 for me but Bing offers a good product - Yahoo and the rest are not relevant.

Microsoft sends ads along with its answers to queries, Yahoo may or may not use all of them, depending on a complex formula.

OK so I guess the company not doing search will license the "smarts" behind the search and the ad buying platform, but then Yahoo will decide which ads are more relevant to the actual search? Confused? Me too, but it does remind me of AOL and Ask.com arrangement with Google.

You can go direct to Ask.com and buy from them or you can rely on Google to show your ads in Ask.com's results. This gives Ask the ability to slot direct advertisers first, but to me this arrangement seems suboptimal for Yahoo.

Sure they can slot other people and use their sales team to sell cross product deals which keeps them in the game, but the only way I see Yahoo's ability to scale across the long tail of advertisers is to "subcontract out" all of the other search advertisers to Bing.

I get that, but why all the hoopla around the Bing deal? Why announce you were never a search company? Why say you are now in the game when giving up the technology aspect of search and the long tail of advertisers to Bing? Seems like the Yahoo ship is rudderless to me.

PRE GOOGLE OVERTURE RULEDBack in the early days of search, I cut an advertising deal for CSFBdirect with GoTo.com which would later be rebranded as Overture. This was before Google had a paid advertising platform. The folks at Overture were great and so was the platform powering our paid search results for delivering new account openings. Everyone was happy, everyone that is who wasn't getting screwed on the bid spread. Anyway then along came Yahoo who bought Overture.YAHOO FAILS TO INVEST IN SEARCH - GOOGLE GROWTHIn 2003, Yahoo bought Overture and in the beginning things were fine. The search sales team remained the same and our results were pretty steady. Google came on the scene and then of course the paid search landscape changed. However Yahoo held its own for us (then Harrisdirect) but by the middle of 2004, Yahoo really started to tank and Google zoomed past them. This was a double whammy for Yahoo. They hadn't invested in the search platform and Google grew which actually ended up hurting them. Google never looked back and left Yahoo in their dust.

NOW BINGBasically Yahoo is repeating history. Clearly they were caught off guard by Bing with all of their management shakeups and as I wrote Yahoo was the short term target for Microsoft with Bing. In fact, Business Week's article on Bing a month back or so highlighted how much damage it would do to Yahoo. Now instead of being able to invest in their search platform or my likely because of their lack of investment in the search platform in recent history (Lu left Yahoo in August 2008), they can't compete with Bing let alone Google.

Therefore Yahoo pretty much dooms itself in the long term by ceding control of their search technology to Microsoft. Sure in the short term it is Yahoo's only option to even have a viable search program; plus, combined with Microsoft who gets a huge boost in search traffic, it actuallyt creates a reasonable competitor to Google. However, this market is driven by technology and the latest improvements to search, now Yahoo removes itself from the game probably forever.

We will get the
resources and scale we need to compete effectively in search and to continue to
drive new innovation for customers and advertisers, while Yahoo will increase
their focus and investment on their online consumer experiences and other
business priorities.

As you’ve heard me say many times, search is a critical business for
us. We took a major step forward two months ago, when we announced
Bing. Already, Bing has generated huge buzz, great reviews, and early
usage figures ahead of our expectations.

Today we’re taking another important step in redefining search and search
advertising. Later this morning, I’ll be announcing a partnership with
Yahoo in a conference call with Yahoo’s CEO Carol Bartz.

This deal is a win-win for Microsoft and Yahoo. We will get the
resources and scale we need to compete effectively in search and to continue to
drive new innovation for customers and advertisers, while Yahoo will increase
their focus and investment on their online consumer experiences and other
business priorities.

As part of the deal, Bing will become the search and search advertising
platform for all Yahoo properties, and we will acquire the rights to Yahoo’s
search engine and advertising platform technology. The combination of
Bing and Yahoo’s scale and technology will accelerate the improvement of search
– we’ll be able to add new features and improve the relevancy of search results
more quickly than ever. And with expanded scale, we’ll be able to offer
advertisers greater return on their investment.

There will be tremendous efficiency gains for both companies.
Microsoft will assume responsibility for constantly improving search and search
advertising technology on behalf of both companies. We see so much
opportunity improve search on behalf of our customers – to make search more
relevant and more useful to consumers, and more than just a list of blue
links. Yahoo will assume responsibility for search advertising sales to
certain premium customers on behalf of both companies. Given the huge
opportunities in search and online advertising, we plan to redeploy most if not
all affected employees into new high-priority functions.

Given the importance of the search marketplace, this proposed agreement will
of course require careful review by regulators, which will take some time, but
we believe it will strengthen competition and choice.

It’s been a long road to today’s announcement, but I’m extremely happy with
where we ended up. This agreement will help bring choice and transparency
back to consumers, advertisers and publishers. It will accelerate our
efforts to restore competition to the search market currently dominated by one
company. And it’s a huge validation of our strategy to redefine search,
and all the great work the Bing and adCenter teams are doing. This deal
will accelerate our efforts toward long-term success in search and search
advertising.

You can learn more at a joint website we’ve established, which provides a summary
of the deal and the advantages it will provide for consumers, advertisers and
publishers.

I saw a bunch of links over the weekend that was touting some small minute gain of Microsoft in the US Search market due to Bing. Most of these posts promote the $100 million in advertising Microsoft is spending and the rave reviews Bing receives for usability as a reason for Google to worry. I think these articles are just ways for people to take a shot at Google or folks that really want to cheer for an underdog. BTW - here's a good synopsis of the recent search postings courtesy of MediaPost.

I've worked with Microsoft for about 10 years. I also spent a while at AT&T so I know how big monopolist companies think. Sure would Microsoft like to knock down Google? Of course. Do I think that's their short term target? No. It is Yahoo. Here's why...

Microsoft tried buying Yahoo and was turned away. That was the classic telcom move from the 90s. Don't spend the money buying share, spend the money buying the competitor right above you. When Yahoo turned them down, now we see what MSN's plan B was.

Google has way too many intertwined products that all types of users benefit from. Google has free tools for publishers, advertisers, and consumers. Some like Google Docs and Google Reader cut across multiple user types. Basically thinking about wars fought without computers, Google is an entrenched opponent dug in on a giant mountain - it would require too many battle fronts to take them on. However,

Yahoo has little defenses. Seriously, how many Yahoo products do you use? Sure they still have a dominant web presence, but they don't work together that well. You use Flickr? Is it integrated with their products? Do you advertise with Yahoo? Is their display advertising inseparable from their search? Do they have intertwined products that all types of users want or use? Yahoo with its new CEO is a company in disarray right now and their search share is clearly within MSN's reach.

Microsoft needs Google to protect them. Huh? Yes protect them from the Federal Government. Let Google be the dominant force in search and let them take any potential heat. MSN would rather play the David to the Google Goliath and stay out of the Federal Government's anti-trust cross hairs.

Yahoo is the search company in deep trouble because of Bing. Yahoo once lost their lead in search to an upstart named Google because of internal struggles and an unwillingness to invest in their search platform. I'm afraid it will happen again. Microsoft clearly has Yahoo in their sight and Bing was the plan B when buying Yahoo fell apart. Steve Ballmer will get his revenge on Yahoo.

Yes you woke up this morning and you can read all of the reports and blog posts on Microsoft removing its bid for Yahoo. Me? I still think it will get done, but based on my own personal observations, I think Microsoft should take a long hard look at why they want Yahoo so badly. I've never been in mergers or acquisitions and I'm sure the folks at Microsoft who are/were running the deal are highly paid and very experienced individuals, but here's why I believe Microsoft should be happy about the deal breaking up.

I don't believe the online advertising world is as simple as buy up your competition and Yahoo's ad revenue become Microsoft's ad revenue. All buyers today know about both companies and make decisions based on audience, content, and price. The audiences are different and buyers know this. How much of Yahoo's ad revenue Microsoft would have kept was probably the biggest factor in Microsoft's bid.

This isn't like TV in the 70s where there are only a few channels. Today's online advertising marketplace is very splintered with social networking, blogs, portals, and other sites vying for your time. Sure a few publishers dominate the top of the pyramid, but there are large audience duplication rates and experience media buyers know this. Simply buying one of the top 3 properties doesn't mean you are buying up a specific audience. However, this strategy does work from a search perspective and how much of that revenue Microsoft would keep was probably factor #2 in the bid.

Yahoo, AOL, Microsoft, and Google all have a different look and feel and people choose these sites to frequent for various reasons. Google pretty much makes a living indexing and aggregating the information for you in a simple fashion. The other sites make a living arranging the information, cutting deals with content generators, and sometimes making the content themselves. People go to different sites for whatever their reasons are and Microsoft probably would have kept some of that unique Yahoo traffic, but how long would have Microsoft kept the Yahoo properties and would they continue over the long haul to invest in it? My guess is - not very long.

So after looking at advertisers, audiences, and content what assets do you have left? Employees and that is where this deal probably was meant to never get closed. I have friends at both companies and while I'm sure quite a number of them could work in either organization for the most part there is huge culture clash. Just visit the NYC offices of Google, Yahoo, and MSN and you'll see what I mean. Google looks like a huge frat house with gourmet food, Yahoo like a college dorm, and Microsoft, well it looks like a Government office building. The people who made Yahoo an internet destination and are making changes to their platform are people that I just don't see being willing acquisition pawns. And, without Yahoo's staff who helped create the content and look and feel, the Yahoo brand would have just whithered away which would have killed the audience and advertising revenues. When I don't know but you get the idea.

Point #4 is probably the biggest reason why Microsoft should be happy the deal didn't get done. The rule of thumb in acquisitions is that the vast majority of employees from the acquired company don't stay. However, unlike a lot of other acquisitions (like E*Trade's acquisition of Harrisdirect) it is/was Yahoo's staff that built their presence and continues to make changes to their platform to keep it fresh. Unlike other businesses, in the internet if you don't continue to invest in your product people will leave and find the newest site (Overture losing out to Google). The Yahoos who made/make those changes are probably people who wouldn't have stayed past a retention bonus that Microsoft was nervous to pay out on.

I read this article this weekend in Business Week called Will Yahoo! Feel the Love? and I found it very interesting. The article basically focused on two important aspects of any merger - people and product. Here are a couple of very relevant points from the article:

"If I was Google, I'd be thrilled. I can steal a lot of top talent out of Yahoo" said Norm Fjeldheim

"Virtually all of the deals from Hell are done by companies that are collapsing into each other's arms like defeated prize fighters" say Robert F Bruner author of Deals from Hell.

"Google is the single biggest threat Microsoft has ever had" said david B. Yoffie

The company (Microsoft) is hoping to bring together Yahoo's research and development staff who've done innovative work in online advertising auction theory and data mining

Those 5 bullet points outlined the challenges Microsoft has and that's assuming that Yahoo agrees to the deal which is looking less likely at this point based on this other article found on Business Week. Yahoo has been losing key staffers and management now for almost a year, but there are some very talented people still left like my good friend Richard K. I wonder how they would feel if they were kept on by Microsoft. Sure there will be a lot of duplication in staff positions but based on my experience the acquiring company has the leg up on key positions; plus as mentioned in the article the cultures are really different.

Yahoo! well is still that company with the purple chairs, fun loving people and Microsoft is very business like. Microsoft's attorneys are slow and methodical as is their sales staff. Speaking of sales staff Microsoft's has always been multi-layered and I could never tell what the chain of command was; for me it was my account person (ex - Dave M whom I like a lot) and then their head of media Joanne Bradford. Seriously, I can't tell you how many different layers of upper management I've had over the years with Microsoft. Every few months the new Account VP would want to meet their clients (always a good practice) but I grew tired of the meets and greets because the people would get changed out. Personally, I can't see how the employees will merge together.

The article referenced Yahoo's data team and I've always been fond of them. The problem with them going forward is how many of the data folks stick around with MSN's more conservative privacy policies? Remember I grew up in a data and analytics group in the old Bell Laboratories at AT&T and at the end of the day the data was only as good as the people that managed it and the people who analyzed it. An old boss of mine in BOA named Rich L once said "information is what smart people do with the data" and keeping those smart Yahoo data geeks around will be a problem for Microsoft.

Finally Microsoft's Najim is 100% accurate when he says that adCenter is better than Panama. I've had my problems with Panama from day 1. Panama increased my costs and I saw my conversions drop. Microsoft I've always been a fan of when it comes to ROI and conversions but sadly there isn't enough volume on Microsoft. Other than MSNBC there really isn't much traffic and that of course goes for search.

I do think Microsoft has to make this move to compete with Google. However, they have huge challenges ahead if they are counting on key people remaining through the merger. When E*Trade acquired Harrisdirect one person told me that historically 90% of acquired employees don't last a year. I don't know the source and it could only be anecdotal but based on my experience I certainly believe that number. Sure you can pay people with retention bonuses but they only last as long as that contract.

Yahoo continues to have challenging times and they are laying off people. See this article from the Wall Street Journal. It looks to me like the changes that Jerry Yang put in place while they might be the right tactical fixes, Yahoo seems to be caught in a riptide and needs a completely new direction.

The search industry is led by Google which holds a huge lead in search followed by Yahoo and then MSN. It reminds me of the telecom industry back in the 90s. The only way to compete with the top dog is for the smaller players to get together and compete. That's why I wrote a while back an article called MSN to Yahoo: An Overture in The Making? A rule of thumb for me in the search world is that Google is where all the action is, MSN conversion is off the charts but no volume, and Yahoo has lower conversions but volume is big. Combining them makes a lot of sense to me and still does.

Yahoo had (yes I wrote that and stay with me for a sec) great customer service and was able to weather the customer satisfaction storm when key management left like Wenda. However with these key management departures selling Yahoo might be a little easier now especially with a depressed stock price.

I don't see MSN letting go so easily and wondering what Google will do next. Any product changes or personnel changes that Yahoo had in the works will be derailed. Yes I know they will tell you that they will keep their eye on the ball, etc but remember I lived through AT&T acquisitions and consolidations and then the eventual buyout of Harrisdirect. People care about their jobs and their lives and they are not robots. Guaranteed that any product timelines that were undoubtedly pushed to their limits will slip because well people will care about their personal lives and may not be charged to deliver a product that won't be needed.

MSN pounces when they needed to to compete with Google. Yahoo to me looks finished, but perhaps a resurrected Overture could compete on the search side with Google.

I saw this post today from Steve Rubel called Five Reasons Why A Pay Per Click Recession Looms and it got me thinking about a post I've been meaning to write. Couple that with the announcement that AOL is laying off 2,000 people (see this analysis by Kara Swisher over at BoomTown) and I think you can see a post forming. Also Reuters has an article called Ad dollars flood web, but will they go far enough that talks about how web advertising may be over-hyped. So between those articles and the New York Times article that Steve referenced it got me thinking having we seen this movie before? Now, I won't get tit for tat with Steve because he brings up a lot of valid observations, but I don't think a PPC Recession is coming, definitely a slow down in growth rates. I also don't believe CPAs will push CPC aside and that's mainly because I've seen this movie before.

Steve's 5 reasons are Clutter, Declining Relevance of Traffic unless it results in an action, Rising Costs, Marketers Spread The Ball Around, and Search Ads Are Viewed As Untrustworthy and all of them can be extrapolated to advertising in general, not just search. Let's use Steve's reasons with my own historical perspective of why a recession isn't looming, but a revaluation of the expectations of online advertising is going to occur.

CLUTTER: Way back in my early days of online advertising at AT&T circa 1998, we had a theory that said "if you bought all of the major portals (aka on ramps to the internet) you can reduce the amount of competitive ads that a user could see" and thus AT&T had deals with Yahoo, Excite, Lycos, and iVillage (AOL had a deal with MCI). AT&T paid through the nose for these deals and I had the honor of canceling them one by one as the deals didn't pan out. Basically, advertisers, who only now are discovering the internet, are shifting ad dollars away from more traditional vehicles to online; this means that inventory will tighten, costs will rise, and then advertisers will start to wonder, why did I shift those dollars in the first place.

DECLINING OF RELEVANT TRAFFIC: Back in the old days people wanted to know about eyeballs - how many people saw my ad or how many people visited my website. Personally because I grew up in a direct response, results oriented world I always wanted to know about conversions and what my CPA was. In fact, it let me buy on a CPA basis even back in 1998. CPA dealsc peaked around 2002 when inventory supplies were easy. CPCs, CPMs, CPAs don't matter all that much because what really matters is whether you are hitting your goals (a poorly performing CPA deal means you get nothing and that includes impressions).

RISING COSTS: See above and I don't just think it is a search problem, but search has probably the most to lose. When costs rise advertisers will start to turn back to Direct Mail (yes I wrote that) for a segment of customers and even TV ads. A very smart person (Norm Lehoullier formerly of Grey Interactive) once told me that every medium has its place and for direct mail it might be for an older audience.

SEARCH ADS ARE VIEWED AS UNTRUSTWORTHY: What ad isn't? Search just seems to be more trusting probably due to relevancy factors as well as mixing up of organic search with paid search. That's always been an erroneous observation.

MARKETERS SPREAD THE BALL AROUND: This is probably the most significant problem for any site owner and not just search. There are so many sites out there that try to have specific content to attract more ad dollars (proof see the multitudes of social networking sites) that it becomes harder and harder to figure out where to place your dollars. Blogs, social networks, Google, Yahoo, ad networkers the list goes on and on. Try figuring out which ad network to place your dollars with. All of them claim they have the best sites, the cheapest inventory, the best behavioral targeting, the best results, etc. This is a widespread problem for the industry and the way it will shake out will be marketers will stick with the bigger sites and the bigger networks only because they hopefully will control more of a user's time during a day and they have less attention to spend on the one highly relevant site that delivers little volume. Why do you think MSN, AOL, Yahoo, and Google are gobbling up other sites? The battle will be not for users but for average time spent on a site.

Really, this movie has been seen before. It will shake out like it always does which is a few big players controlling as much of the ad dollars as they can. That's why there is a consolidation occurring and when you can't get enough of your forecasted share of revenue, big layoffs can occur like they are at AOL. Google, Yahoo, and even MSN will survive because they will make the acquisitions that are needed to keep going. I'm not ready to forecast doom for Google or search, not when there are still more advertisers to jump into the mix (small business and local merchants).

So, I have my still brand new HP laptop (read Once You Have Good Lap, You Don't Go Back) and as usual I got the highly secretive Microsoft XP update. Now, while you might think I'm a techie person, I am not. I used to be but that was circa Windows 3.1 (yes I just dated myself). So when I try and do the customized install to see what is being forced onto my PC all I get is Microsoft speak as to why Security Flaws 1-999 need to be installed. Next up, I try and research these patches but once again I get dumped into some giant search results page that requires a PHD in Computer Science to even navigate myself to some crappy answer. In the end like most people, I shut down and forget to hit the link that says shut down without installing the latest patch, and wham I get this security patch jammed down my throat.

So, this morning when I turn on my laptop what happens with this great and needed Microsoft patch? First, my sound card doesn't work and this seems to happen every single time one of these crappy patches comes through. After slogging through Microsoft's unhelpful knowledge base, I turn to Google to find other people with the same problem. My fix? I have to go into device manager, find my sound devise and restart it.

Next up the colors on my screen are all screwed up. See this screen shot. The toolbars are
greyed out and my fonts are messed up. Of course both of these problems probably have to do with updating the drivers, but that's not my point. Why shouldn't I be told in my patch that I'll need to update drivers? And remember this happens everytime Microsoft sends out a new update and its not right that I'm left to fend for myself with no direction or help. All I can get for free from Microsoft is their inconvenient, jargon laden, un-knowledge base.

And, do you know what my only quick fix is for the color? Rebooting before I can download new drivers. Seriously. Why can't Microsoft provide better free support for the legion of Windows owners in the world. All it would take would be better search results powered by community folks, but maybe Microsoft has caught onto the search strategy yet.

There has been so much coverage since the NY Post dropped a bombshell that Microsoft was interested in a deal for Yahoo again, that I decided to wait a few days to soak up all the coverage before posting. (BTW - don't you just love it when the NY Post gets the scoop on more reputable papers like the New York Times and The Wall Street Journal). Anyway, before I dive into why this would obviously help Microsoft if done correctly, I want to link to one more post on the subject from Henry Blodget of Internet Outsider because he has a great summation of how this deal could work or not work and this forms the basis for my discussion:

Would it be a smart strategic move for Microsoft and Yahoo to combine
forces? Absolutely. Is the best way to do this to have Microsoft suck
Yahoo into the massive Windows/Office borg? Absolutely not.
If Microsoft buys Yahoo, Microsoft should immediately spin the
Yahoo-MSN business out as a separate company. If it doesn't, both
Yahoo and MSN will die.

Now, I've been buying online advertising on my own for a long time (yes, I've rarely used a media buying agency) and Yahoo has been and continues to be one of my favorite publishers especially when buying in the financial services category; Yahoo Finance is the crown jewel for any financial services campaign. Yahoo has started to right the ship, if you believed it was foundering at one point, and has great properties and social marketing platforms like Yahoo Answers, Flickr, Yahoo 360; plus, it still has a top property in Yahoo News as well as great fantasy sports properties. The other pluses in Yahoo's favorite is its industry class behavioral targeting, cloning modeling capabilities, Yahoo's homepage, as well as a top notch sales and account management team. The only area where I see Yahoo slipping, even with Panama is on the paid search side. More on that a little later.

Microsoft's MSN property on the other hand, is completely adrift with no way of fixing their problems anytime soon. Yes, I've bought on MSN in the past and continue to dabble with their search platform, but I really find it difficult to come up with the rationale for placing any banner ads with them. Here's why:

Prices for their ad units are typically more expensive than I can get for the same unit and while they believe they have a better product to justify the increased spend, I just don't see it.

Yes they have top traffic numbers, but I know of NO ONE that uses that site any more

Other than MSNBC, their content in my opinion, is on par if not slightly below what you can find elsewhere. It is a great property, but the CPMs are way too high.

The only mass group that I believe has some value on MSN are professionals, but sadly MSN (or Microsoft) does not allow for behavioral targeting to them. So while I would have loved to have put MSN on a recent media plan targeted at a particular professional audience their policies didn't allow for it.

I can't find any innovative online marketing or social marketing platforms emanating from them and I've yet to see any links, commentary, blogs that come from MSN.

Finally, when I was looking to reach college students, their CPMs for Facebook were way too high which led me to look elsewhere.

Based on all of the above, I can see why Microsoft would covet Yahoo especially if they listened to Blodget and spun off the group. However, why would Yahoo want to be a part of it? Well, the only reason I can see is to combine their search business again back into one platform that say would be called Overture.

From my recent experiences with both Yahoo and MSN's search platforms, I can tell you that I've had more success with MSN than Yahoo and that wasn't always the case. Maybe I'm the only online advertiser that has seen this, but ever since Panama was launched, my Yahoo results have gone downhill. Sure, Panama allows me to spend more, but for the majority of my clients (hey political types that are reading this, remember I do a lot more advertising outside your space) I'm seeing better returns on MSN than Yahoo when it comes to return on advertising spends. Yes, I do believe MSN's ads that tout their high ROI. The only thing that MSN Search lacks is volume and once again by combining with Yahoo the two of them can get back to being Overture which used to outperform Google back in the early days.

Microsoft's overture to Yahoo should solve a lot of their problems if done correctly. However, MSN could suffer a brain drain of Yahoo's talent and Yahoo's audience if they try and force fit the merger under the Microsoft branding and draconian behavioral targeting policies. If nothing else, they should combine their search business once again, bringing the high ROI capabilities of MSN's search with Yahoo's traffic so they can compete with Google once again as Overture.

I've been advertising with Google since way in the beginning of their PPC platform and continue to run very large search marketing campaigns. I've also run huge (north of $130 million in online advertising) display/banner advertising campaigns since 1997 and always have used an ad server for placing my ads, tracking results, measuring post-click conversions, and etc since 1997. I've tried them all - MatchLogic, BlueStreak, Atlas, and of course DoubleClick.

So, unlike other blogs that claim to have experience (especially in the political marketing blogosphere), I actually have a ton and continue to work in this space. One of things that's always been tough is having a single source for reporting, optimization, trafficking, planning, and counting conversions (more on that in a second) and now with a stroke of a pen and $3.1 Billion in cash (yes cash or as Henry Blodget wrote: a few quarters of free cash flow) Google solves advertisers problems by acquiring DoubleClick.

Now why does this solve a lot of problems? Simple. Let's take a look at how this helps advertisers and agencies:

I've never been a fan of DoubleClick's customer service, although to be perfectly fair, I haven't experienced it in the past 5 years, but combined with Google I may give them another shot

Counting conversions becomes a lot easier now that I can use one source for tracking display ads and search ads. Sure, you could have used a combined platform in the past, but that needed long redirects and a PHD in setting up tracking tables; and it gets more complicated with rich media executions

Double counting of latency conversions should now be a thing of the past because theoretically, GoogClick will have a complete picture of the post-click tracking

Hopefully, the reporting platforms will become easier to use like Google's today

One name to present to clients and upper management for reporting and tracking - Google

Finally, it should be easier for optimization because both the advertiser and Google will have a complete picture of the media buy and the relationship between display and search advertising

For Google, the advantages are huge starting with the fact that they used cash and kept DoubleClick out of Yahoo's and Microsoft's hands. They can combine search, display, blogs, email and site targeting into one neat package; plus, retargeting efforts become that much more ubiquitous. I never bought off on Google's complete search tracking package, but now I might. Finally, imagine all of that data they now get to go through and analyze; it can only improve their targeting capabilities which is currently top notch, but could use a boost (just check out some of the ads on my blog to see what I mean by targeting mistakes).

Finally, where does it leave Microsoft and Yahoo? Yahoo, probably not that much worse off because I know they have powerful targeting tools already and analyze the data on the family of websites. Microsoft? I think they are fighting against a strong current and looks like every stroke they try to take in the online river, they just end up going back towards that waterfall. Nice move Google.

Seriously, how many of you visit MSN these days other than MSNBC? Do you use them for search or even the homepage anymore? I doubt it. I can't tell you the last time, I even thought about searching there for a subject, finding content, or even when I've received traffic to this website from them.

They seem to be searching for a brand identity and while they have one at the desktop level, there seems to be no purpose to their website destinations. None and they are falling faster behind their major competitors and I won't even compare them too Google which is like comparing a major league pitcher with a single A rookie who can't find the plate with their 89 MPH fastball.

Visit Yahoo these days and what screams to me is content and community. They still have their crown jewel which is Yahoo Finance and everything they do these days has a spin on embracing the social community. Yahoo Answers is the major player in community search having put Google's out to the scrap heap. And, while their search platform isn't Google, I get a fair amount of traffic from Yahoo search and will occasionally use it myself; plus, they do power a fair amount of major publisher's site search.

AOL, who not that far in the past I left for dead, is really making a comeback. First, their Political Blog is actually really interesting and AOL IM is a must own for folks. Their local content is fairly useful and let's not forget Mapquest. Plus, the sales and account teams at AOL will bend over backwards to make their campaigns work.

Then you have MSN which has MSNBC and nothing else. Search - never. Streaming video, sexy homepage, community - nope. Oh sure, their CPMs are way too high for what audience visits them, but that has stopped me from buying on them for years; one thing you learn about online advertising is that you can find the audience elsewhere and usually for cheaper rates.

Even in last week's Business Week, they painted a bleak outlook on MSN and MSN Search (or Windows Live Search or whatever it is called now) in the article called Where is Microsoft Search? You can read it for yourself, but quickly: search volume is heading south, change in management, confusing branding, and no real strategy for turning it around. Plus, to add insult, there was a blurb on political search in the same article called How to Read The Google Tea Leaves.

Sure, they just bought Tellme which actually fits in with their offline/desktop strategy, but I think the rumors of them looking to purchase DoubleClick for a couple of billion seems crazy. I just don't get that. MSN needs DoubleClicks's ad server or email push engine? Why? I've never been a big fan of DoubleClick and canceled two deals with them and I'm guessing their largest customer AOL would do the same if Microsoft bought them. MSN's biggest problem is not the advertising technology behind them, their biggest problem is to make MSN.com an internet destination for a specific target audience. Check out these demographics comparing AOL, Yahoo, Google, and MSN as reported by Quantcast.com (numbers compared versus the internet average = 100)

MSN has a higher skew towards the 55+ audience and has the lowest average of younger audience. AOL, not surprisingly has the highest % on the young end as well as a high % of the older audience. Google definitely skews toward the younger audience and has the lowest ratio of older users.

MSN needs more content and a reason to have people visit them. I don't have the time to read through their judgments over the years, but it seems to me that they have to figure out a way to leverage their desktop products better. The PC search on Windows sucks. Maybe instead of trying to battle Google on the internet maybe they should go back to their roots. Fix PC search and figure out a way to supplement that with online search results. Sure that sounds like going back to the future, but their older audience can use their help; heck, when I was looking for help on why my PC was acting funny today was when I really saw how broken they really are.

MSN.com not sure what I have in common with it anymore. Microsoft still powers my two laptops, a desktop, and my Treo 700W. I occasionally use Internet Explorer and spend a ton of time with Microsoft's Office Products. Those have to count for something and there are millions of people with that same profile plus Xbox owners. If I was at Microsoft strategy, I'd focus all of my energy at webifying those important contacts in every facet possible. You do a desktop search, you should also have a side-by-side online search results; not sure if that's illegal for them but if it is, they ought to try and fix that.

PardonMyFrench,

Eric

*****UPDATE****************

Google and the other usual cast of characters are also looking at buying DoubleClick. Personally, I don't get what the big deal is because I've personally found their technology behind other companies like Atlas and BlueStreak....

Hey, it has been a while since I did a marketing rapid fire, mostly because I use the tag posts for you readers. Anyway, a couple of random observations from the last day or two...

On a subway train today I saw an ad for MSN Direct's coffee maker
which I found surprising. Not that I thought they shouldn't advertise, but that it was on a subway train which is pretty much not targeted. Plus, I found it interesting that the product does NOT connect to the internet for data but to FM. Interesting that MSN's brand to me stands for computers and connecting to the internet and this product doesn't do that. Heck, I might have bought it if it connected to my home network. How hard could that be for Microsoft?

Speaking of Microsoft, I've had a lot of problems with their search platform lately. Not the results reporting but what seems to be an over zealous editorial team rejecting words left and right. And, to top it off a new mantra to differentiate their marketing campaigns from Yahoo and Google. Not sure what they mean, but with their low search volume, I think they should be more forgiving to marketers hanging in there with them.

Speaking of search there were two small, but very good articles today in The Wall Street Journal. First, Yahoo Ad-Ranking Tools Clicks With Online Users which shows the success that Yahoo is having with their new search algorithm for displaying ads. Basically, there new model positions ads based on cost, click rate, and relevancy (and others) and this is generating more clicks for them. And, in a related article a Federal judge ruled that Search Engines Can Legally Decline Ads which allows them to continue this practice.

Staying in the search mode, quite a few search queries have ended up at my website from the search terms "Springsteen social security number". 1) This is scary that people are trying to do that 2) Shows how natural search isn't always reliable because that is just a concatenation of two mutually exclusive posts. I of course have no access to that type of data.

Finally, people still consistently search on my website for results on the crappy Lowermybills.com ads which no matter how they dress them up with presidents, people shaving copy into their hair, are just plain the worst banner ads I've ever seen. And, judging by the traffic, you readers agree too.

Stuff

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